Kenya-Ethiopia Power Trade Enters a New Phase as Regional Grid Expands

Last Updated 5 hours ago by Kenya Engineer

Kenya is entering a new phase in its electricity relationship with Ethiopia, with imported power increasingly becoming part of the country’s normal supply mix rather than an occasional supplement to domestic generation.

The development brings clear economic benefits. Ethiopia has abundant hydropower, Kenya has a growing electricity demand, and the Kenya–Ethiopia interconnector provides access to comparatively low-cost electricity while strengthening the wider East African power system.

But the scale of the relationship is changing quickly enough to raise a question that deserves more attention: how much of Kenya’s electricity system should depend on generation outside its borders?

Data contained in the Energy and Petroleum Regulatory Authority’s latest statistics report shows that Kenya imported 1,913.66 GWh of electricity during the financial year ended June 2026, equivalent to 12.19 per cent of the country’s energy mix. Imports increased from 1,533.85 GWh in FY2024/25. Ethiopia accounted for 1,577.66 GWh, or 82.45 per cent of all imports, while Uganda supplied 322.06 GWh and Tanzania 6.53 GWh.

The trend is significant. Kenya’s electricity imports have risen from 644.07 GWh in FY2022/23 to 1,199.80 GWh in FY2023/24, 1,533.85 GWh in FY2024/25 and 1,913.66 GWh in FY2025/26.

And the increase is not over.

In July, Kenya Power said it would take an additional 200 MW from Ethiopia from December 2026 under its existing power-purchase arrangement. The original agreement signed with Ethiopian Electric Power provided for 200 MW, meaning the contracted Ethiopian supply will rise to 400 MW.

That comes as Kenya’s domestic electricity system is itself under pressure from rising demand.

The growth in imports naturally raises the question of whether Kenya has a statutory limit on the amount of electricity it can buy from other countries. The answer, based on the current legal and regulatory framework appears to be no.

The Energy Act, 2019 places the importation and exportation of electrical energy within the regulatory mandate of EPRA. The Authority approves electricity purchase and network-service contracts and issues the relevant licences. EPRA’s own description of the electricity market makes clear that Kenya Power purchases electrical energy through power-purchase agreements approved by the regulator.

The Energy (Electric Power Undertaking Licensing) Regulations also provide for licensing of undertakings involved in the import and export of electrical energy.

The more important regulatory question is whether individual PPAs, import arrangements and transmission capacity are being assessed against the resilience requirements of the entire Kenyan system.

Cheap power is not the same thing as zero risk

The case for regional electricity trading is strong.

Kenya does not have to build every megawatt of capacity it consumes if neighbouring countries can supply electricity more efficiently. Hydropower from Ethiopia can complement Kenya’s geothermal, wind and solar resources, while regional interconnection allows countries to exchange power according to their different generation and demand profiles.

Kenya’s own policy direction recognises this. The draft National Energy Policy has identified participation in the Eastern Africa Power Pool as an opportunity to import and export electricity and stabilise the grid. It also envisages Kenya moving towards a competitive wholesale electricity market.

The vulnerability arises when a regional trade arrangement becomes a substitute for adequate domestic resilience rather than a complement to it.

Much of the Ethiopian electricity available to Kenya is hydropower. That introduces a hydrological risk. A severe drought affecting Ethiopian reservoirs could occur at the same time Kenya is experiencing hydrological or demand-related stress.

Kenya Power’s managing director Joseph Siror has already publicly raised this concern, warning that dependence on hydropower imports could become problematic if drought reduces the exporting countries’ ability to meet contractual obligations.

That is not an argument against importing power. It is an argument for treating imported electricity as one component of a diversified system.

The transmission network is expanding

The import story is also inseparable from Kenya’s transmission investment.

In September, President William Ruto commissioned the 132 kV Awendo–Masaba transmission project in Migori County. The KSh1.4 billion project consists of a 28-kilometre single-circuit transmission line, a new Masaba substation and an extension of the existing Awendo substation. KETRACO says it has increased power-transfer capacity and improved reliability in parts of Migori County.

The project is particularly relevant because it replaces reliance on a long 33 kV network serving areas around Masaba. The upgraded system is expected to support industrial operations, public services and the Isebania border crossing with Tanzania.

Earlier in September, KETRACO also completed commissioning of the 109-kilometre 132 kV Machakos–Konza–Isinya–Namanga corridor. The project incorporates 132/33 kV substations and strengthens supply along a rapidly developing economic corridor. Parts of the corridor had been energised earlier, including the Machakos–Konza section in 2016 and the Isinya–Namanga section in 2024.

The Sultan Hamud–Loitoktok 132 kV line and its 132/33 kV substation were also commissioned as part of the recent Kajiado transmission investment programme. KETRACO says the projects are intended to improve reliability and provide additional capacity for economic activity in the county.

In August, the 72-kilometre 132 kV Nanyuki–Isiolo line was energised, including a new Isiolo substation and expansion of the Nanyuki substation. Part of the line was placed underground near Laikipia Air Base because of security restrictions.

These projects matter because electricity security is not determined by generation alone. A country can have sufficient installed generation and still experience supply constraints if transmission capacity is inadequate or if power cannot be moved from generation centres to demand centres.

The question Kenya should now be asking

Kenya’s growing electricity trade with its neighbours is not inherently a vulnerability. In a properly integrated regional power market, interdependence can improve reliability by allowing countries to draw on one another’s surpluses.

The vulnerability emerges when the system lacks sufficient diversity.

Kenya therefore needs to look beyond the headline percentage of imported electricity and monitor at least four variables: the share of peak demand that can be met without imports; the contractual firmness of imported supplies; the diversity of exporting countries and generation technologies; and the domestic reserve margin available if an interconnector or major exporting plant fails.

At 12.19 per cent of the annual energy mix, imports are still well below the 25 per cent level that might ordinarily be regarded as a significant strategic threshold. But the trajectory is more important than the number itself.

With Ethiopia’s contracted supply set to rise to 400 MW and electricity demand continuing to grow, Kenya’s regional power strategy needs to advance alongside domestic generation, storage, transmission and demand-management investments.

The objective should not be to minimise electricity imports. It should be to ensure that Kenya can lose a major external supply source without losing control of its electricity system.